Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Is the £450m average debt, £125m trade finance and .....wait for it £80m overdue tax and VAT part of your reckoning into what is a compelling buy?
Sale of KL will just about pay the overdue tax. What a dog Kier has turned out to be but still puling in suckers.
Would you be willing to underwrite when the company owes £80m in overdue taxes and £125m in trade finance and say £450m in average debt?
I might be willing but only at a price which would cause current shareholders to take a bath and debtholders to write off some debt.
Oh...there is also the pension deficit which is now due. That will be a big hit on interim P&L .
Dividend cover? There is no dividend and will not be for a long time to come. Kier owes the taxman £80m of overdue tax so that will be their first priority. They also owe £125m in trade finance and a big chunky £400-£500m of debt although that number is window dressed at the end of each reporting period.
There has to be new equity and existing shareholders will get rinsed.
Not sure what you mean by that. The fact remains that a company that does not pay its statutory obligations represents a big red flag as in investment.
Its recent update was very coy. How much has it repaid? Is it £1,000 or £10m?
Actually, you may be correct. Kier has not paid £80m VAT and income tax so that would suggest that such liabilities are of no concern. Except of course they are a concern as is the £125m trade finance and the net debt of £310m.
That net debt is more than likely window dressed with average and max debt significantly higher. Kier is in dreadful state and even though they pretend otherwise, it is not business as usual in the company.
Debt in Kier is off the scale. The £80m overdue is a hint if one was needed that Kier is at the limit of its borrowing.
Those month end window dressed numbers are just half the story. The real squeeze comes as they pay their quarterly VAT bill. Bet the subbies are left in the lurch at the end of that month.
There will be an emergency rights issue, deeply discounted with current shareholders taking a bath. No other way out for Kier.
eh...they build houses at fixed price on behalf of housing associations. Look at previous write-offs in accounts. Dont believe me. Believe the accounts...although like everything about Kier out of date.
I guess the interim accounts will be released at some stage....probably in the same week as a Sky exclusive about a Guy Hands bid which never happens.
It really is like Waiting for Godot with Kier.
Agreed on that. The small specialist subcontractors can make lots of money but often have bad debts.
Kier is just not making money. Too many accountants ran Kier for too long. They knew how to present the results in a palatable manner (i.e polish a turd) but do not understand risk.
Why are they late? Probably going concern issues, maybe KL sale but I doubt it.
Biggest issue for me is that £80m in overdue tax. Usually when a company does not pay tax, it is curtains. Essentially, it is a loan by the taxpayers to subsidise a company and causes distortions in the market.
I would think a prepack is on the cards because one thing is sure...Guy Hands will not overpay. He no longer has the money to overpay.
Kier owes £80m in overdue tax. That is a hint that Kier is not making money.
It is relying on the exchequer to fund them, just like they rely on massive debt (£310m month end after window dressing) and credit finance of £125m .
I guess they may as well ask the exchequer to fund them.